It wasn’t the fact that she is a woman that caused Kayla Itsines to scoff at the suggestion her business might one day conquer the world. She scoffed because she lives in Adelaide.

“I said, ‘It’s not going to work, we are from South Australia, no one is going to take us seriously’,” Itsines, a personal trainer at the time, recalls when her boyfriend (now fiance) Tobi Pearce suggested she break out of her small city orbit to go global by heading online. Itsines had been inundated with requests for fitness tips from women around the world who had seen her Instagram posts showing her clients’ transformations. They all wanted their own bikini bodies.

In January 2014 she bit the bullet and, with Pearce, sketched out her workouts to create an e-book, the Bikini Body Guide. It was so successful it was downloaded illegally more than 1 million times as women across the country printed it off, laminated it and hit the local park or gym.

That e-book has since morphed into the fitness app Sweat, which became Apple’s biggest-grossing health app and has been downloaded by 30 million people since its launch three years ago. It’s available in 155 countries and seven languages and the almost instant global success has made Itsines and Pearce the richest self-made 20-somethings in the country with an estimated wealth of $486 million. And they’re nowhere near done yet.

Itsines and her fiancé Tobi Pearce have hit the jackpot with their fitness app, Sweat. Designed as a personal trainer on your smartphone, Itsines and Pearce have evolved what was a Bikini Body Guide e-book into Apple’s largest grossing health and fitness app. The app, which promotes 28-minute workouts, has expanded to offer training guides from US-based Kelsey Wells and yoga sessions with Sjana Elise Earp. With a combined social media reach of more than 35 million people, Sweat is available in seven languages in 155 countries. More than 30 million users have created an account. The subscription‑based app generated $90 million in revenue in 2017-18.

YOUNG RICH LIST 2018

Age

The stellar growth behind online creative marketplace Envato is set to continue, with the company planning to recruit another 100 people for its Australian operations this year, including 40 developers. Husband and wife team Collis and Cyan Ta’eed started Envato with life-long family friend Jun Rung in the couple’s Bondi garage in 2006. More than a decade later the business is turning over $US82.3 million. Profit took a slight hit in 2017, dipping to $US17.6 million from $US21 million as expenses grew. In July, Envato bought Placeit, a Mexican business that allows simple logo design, business card templates and t-shirt designs.

Sector Technology
Residence Melbourne
Wealth last year $216m combined
Rank last year 9

Cyan Ta’eed

8

combined with husband Collis

37

$428m

combined with Cliff Obrecht

17

Online design and publishing platform Canva became the first Australian start-up since Atlassian to join the elite ranks of Silicon Valley “unicorns”, or private businesses with a valuation in excess of $US1 billion. This was thanks to a $US40 million funding round, the sixth since Perkins and Obrecht started Canva from the Perth lounge room of Perkins’ mother’s home. Canva posted its first profit in the six months to December 2017. Its latest funding won the support of heavy hitter venture capitalist, Sequoia Capital, which was an early investor in Apple, Google, WhatsApp, Cisco, Oracle, Yahoo and LinkedIn.

Sector Technology
Residence Sydney
Wealth last year $128m combined
Rank last year 17

High-profile model and businesswoman Miranda Kerr has steadily increased her personal wealth since debuting on the Young Rich List in 2012 with an estimated wealth of $14 million. Kerr, a former Victoria’s Secret model who married Snapchat billionaire Evan Spiegel last year, has steadily built her skincare and cosmetic business KORA Organics. Launched in 2009, KORA is stocked by more than 200 retailers including mega French cosmetic chain Sephora. KORA shareholders include Shannon Rivkin, son of late stockbroker Rene Rivkin. Kerr and Spiegel welcomed son Hart this year. It’s Kerr’s second child; her son Flynn was born when she was married to actor Orlando Bloom.

35

67

What began as posting workout tips using Blogspot has turned into a lucrative subscription-based business, which attracted investment from Quadrant Private Equity this year. More than 200,000 subscribers pay $19.99 a month or $119 a year for Skye’s exercise plan designed to tone thighs, tummy and arms. The Quadrant deal was for an undisclosed sum. Skye shared her return to post-partum fitness after the birth of her and partner Redmond’s first child with her massive audience, which includes 10 million Facebook and 2.4 million Instagram followers. Former army commando Redmond is a director of the business.

Lu is passionate about women taking risks to do the thing they love and says the bigger risk is being stuck in a career for the sake of it, and she should know. Initially she allowed her parents to believe she was climbing the ladder at EY, while instead she quietly built up her online fashion business. The former accountant established Showpo, which now throws off $30 million revenue and employs more than 35 people, in 2010. This year Lu was praised for posting a video about Showpo’s struggle amid web glitches and staffing issues to highlight the pitfalls of small business. She is also co-founder of networking group Like Minded Bitches Drinking Wine, which boasts 80,000 members.

Jane Lu

$33m

Sector Online retail
Residence Sydney
Wealth last year $32m
Rank last year 82

Debut

74

Sector Franchising
Residence Sydney
Wealth last year Debut

Sometimes quitting school can be a tonic for success. Joshua Nicholls left at age 15 to start an electrical apprenticeship. By 22 he had started his own company with a name inspired by the credit card hierarchy that puts “platinum” at the pinnacle. Platinum Electricians began as a classic “man with a van” operation in 2001 but now has more than 160 vans operating across the country, employs more than 350 people and turns over more than $45 million. The company, which operates a franchise model, is jointly owned by Nicholls and wife Alana.

Alana Nicholls

combined with Joshua Nicholls

36

SWIPE >

It was out of frustration that swimwear group Triangl was born. Deering, who had recently met her ex-AFL footballer partner Craig Ellis, couldn’t find a bikini she liked for under $200 for their trip to the beach. In 2012, the pair moved from Melbourne to Hong Kong to build a company providing stylish, affordable swimwear. Triangl’s bikinis have been flaunted by model and reality star Kendall Jenner and singers Miley Cyrus and Ellie Goulding. The swimwear is sold directly through the company’s website and Deering has credited Instagram for much of the business’ success. Triangl has 2.7 million Instagram followers.

Sector Online retail
Residence Monaco
Wealth last year $32m
Rank last year 81

Erin Deering

77

34

$32m

Kate Morris

87

40

$30m

Jobs at cosmetic counters helped Morris realise many women find department stores intimidating. She borrowed $12,000 from the parents of her boyfriend and now husband James Height to set up an online beauty store from her garage. About 15 years later, adorebeauty.com.au attracts millions of visitors each year, sells more than 200 cosmetic brands and turns over nearly $30 million. Woolworths took a 25 per cent stake in the business in 2015, which Morris and Height bought back two years later. Morris launched a Women in Tech scholarship last year, offering $2000 towards tuition and a paid internship to female students studying computer science as either a course or module.

Longes’ beauty industry career began as a receptionist for Dr Philippa McCaffery, a former hospital administrator who opened a laser hair removal clinic in the early 2000s. Longes remembers a clinic in a tiny medical centre that was booked out until 7pm every day. She instantly saw the potential for the business, which opened before Instagram had even been created. Longes teamed up with McCaffery to launch Clearskincare Clinics, which exploded with the advent of the narcissistic age. It stretched to 44 clinics across Australia and New Zealand before being acquired by Australian Pharmaceutical Industries, the owner of Priceline, for $127.4 million in June.

Sector Beauty services
Residence Sydney
Wealth last year Debut

$29m

Alarna Longes

39

89

Australian Financial Review Interactive infographic

Interactive infographic by Les Hewitt

$486 million, no sweat

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From their offices on the fringe of Adelaide’s city centre, the petite bronzed trainer and well-built Pearce map out to The Australian Financial Review Magazine their plans to grow Sweat. Itsines, 27, is wearing her trademark uniform: activewear. Today, it’s black leggings with a grey fleece zipped jumper and her hair tied in a ponytail. Pearce, 26, sports a beard, beige cardigan and a white T-shirt that reveals years of lifting weights.

The son of a wine tour operator and a nurse, Pearce left home at 16. At times he slept at friends’ places, sometimes he slept in his car and sometimes in public toilet blocks. He’s taciturn on the subject of his upbringing, offering up little more than he chose to leave home of his own accord. “I was always very ambitious,” he says.

He rattles off financial statistics as if he completed the double degree in commerce and law at Flinders University that he ditched midway through to focus on personal training, and ultimately building Sweat. He met Itsines in between the barbells and exercise machines at the gym. Her parents are both teachers and she had been planning to follow the same career path, but deferred her study to take up personal training instead. The pair haven’t looked back.

In many ways Itsines is an accidental entrepreneur. At her first fitness job at a women-only gym she was told to take before and after photos of clients. She clung to the habit when she set up her own business, training clients under the patio of her mother’s home. It was when a cousin suggested she post the before and after shots on Instagram that requests for exercise tips started flooding in. “Most businesses are trying their hardest to find a lead,” Pearce recalls. “We had thousands of them.”

Bikini Body Guide

In 2015 they poured the profits from the Bikini Body Guide e-book into an interactive app, a one-stop shop combining a menu plan with Itsines’ workouts of 28-minute circuits: lunges, push-ups, mountain climbers, burpees and more. A messaging system allows users to form their own mini-motivational communities. Women post their own before and after shots on Instagram and Facebook, with the hashtag #bbg (for Bikini Body Guide) and #bbgprogess, looping more and more women into the Itsines universe.

Like getting toned abs, the process wasn’t pain free. The app was in development for close to a year and was hundreds of thousands of dollars over budget when it went live in November 2015. What was meant to be a huge climax instead became bitter disappointment with some 25,000 complaints registered on the first day. The couple and their small team spent the next fortnight working day and night to fix bugs and glitches. When they relaunched a few weeks later, Sweat immediately climbed the charts and within a year became the top health app in the Apple Store, Pearce says.

Today there are 1 million active users per month, though Itsines and Pearce don’t disclose how many of those are on the one-week free trial versus subscribers who pay $20 per month. Their company, Sweat, is on track to turn over $100 million this year. And like any good personal trainers they’ve got some pretty impressive goals.

Building scale means adding more trainers to the existing line-up, which includes US-based Kelsey Wells and yoga instructor Sjana Elise Earp, adding more programs and signing up more users. Itsines’ 10 million Instagram followers are prime candidates; Wells and Earp have a further 3.2 million between them. They are targeting 10 million monthly active subscribers within five years, and estimate they have a target market of 172 million women globally. Big private equity firms have circled. But so far, Itsines and Pearce have turned down all offers of external investment. They don’t like the idea of ceding any control; they’ve gotten this far on their own.

One of 10 women

Itsines is emblematic of the success that digitally savvy entrepreneurs can achieve when they hit on a trend early. Yet as a woman on the Young Rich List, she’s a rare commodity, one of just 10 of the wealthiest self-made Australians aged 40 or under. Not only is the percentage of women on the Young Rich List stubbornly low; it’s gone backwards. In 2003 when the list was created, 23 per cent, or 14 of its 61 members, were women.

The lack of female entrepreneurs hitting the big time is even more puzzling than the persistent lack of women sitting in the chief executive’s office or in Parliament House. Women setting up their own businesses are not presented with the same handbrakes as their corporate counterparts – there isn’t the bullying, sexism, gender pay disparity and an entrenched boys’ club throwing up obstacles to being boss. They are the boss. So where are they?

Melbourne executive Carol Schwartz, who holds board positions with the Reserve Bank of Australia and listed property group Stockland, has long advocated for higher representation of women in executive ranks. When asked about the lack of women on the Young Rich List, Schwartz thinks the main culprit is the world of finance.

“There’s a huge structural issue in venture capital markets. A very small percentage of funds are invested in [female-owned] start-ups and that’s a global phenomenon,” she says. “In the same way that women don’t receive the same opportunities for recruitment or promotion [in corporate Australia], women are subject to systemic bias. Men don’t believe that a woman can build the same size company as a man. When men apply for VC investment, very often they are asked very different questions to women.”

And data from PitchBook – the M&A, private equity and VC database – shows that all-women start-ups attracted just 2 per cent of the $US85 billion invested by venture capitalists last year. All-male teams collected about 80 per cent, with the remainder flowing to mixed-gender management teams.

In trying to explain the gender investment gap, BCG found that women founders are subject to greater push-back when pitching. Men tend to overpitch with bold projections and assumptions, while women are far more conservative. One participant in the BCG study said when she pitched with her male partner, investors invariably directed technical questions to him.

Kate Morris remembers that when she was starting her online beauty product retailer, Adore Beauty, many men seemed bemused by her ambition. Perhaps they didn’t realise how much women spend on moisturiser. “There’s a lot of men I speak to even now who don’t really get it,” she says. “They literally do not get the mindset of a female consumer.” It was while working at a cosmetic counter that Morris realised many women find department stores intimidating. So, aged 21, she borrowed $12,000 from the parents of her boyfriend James Height, now her husband, and set up an online beauty store from her garage. She couldn’t afford to pay someone to do the coding for her website, so she taught herself how to code.

Almost two decades later, Adore Beauty sells more than 200 brands from Aesop to Yves Saint Laurent, straddling skincare, make-up and fragrances. It’s turning over an estimated $30 million annually and its success has put the pair, both aged 40, on the Young Rich List for the first time.

Networking is key

Their first big financing break came from a female mentor to Morris, who knew that Woolworths was looking to invest in a business like Adore Beauty. The supermarket giant would eventually take a 25 per cent stake (an investment Morris and Height bought back two years later in 2017).

“You need to know the right people,” Morris points out when asked why comparatively few women entrepreneurs succeed. “I doubt it’s deliberate but women don’t have those connections and they are not invited to create them. There is still so much stuff happening on the golf course, I think that’s pretty problematic. It is clubby and men don’t seem to look around and say, ‘hey most of the people I know are men, is that not quite right?’”

Building the network needed to get funding is even harder if you have young children. Most networking opportunities, from informal catch-ups to business events, happen after working (and therefore childcare) hours. “All of these events happen at 6pm but if you have a young child you can’t be going to an event at 6pm, or at the very least you need to have a partner who is willing to pause his networking efforts in order to enable you to go. And, unfortunately, I don’t think there’s enough men doing that, taking that equal responsibility,” Morris says. “The person who is paid the most tends to put the least amount of effort into parenting and it all becomes self-reinforcing.”

Graphic

The couple have two children. On the day of a big warehouse move about two-and-a-half years ago, Morris went into labour. She was back at work after three weeks, a result of the couple deciding to share the load equally of building a family at the same time as they built a business.

“I would go to work in the morning and he would go in the afternoon,” she recalls. “It’s easier in your own business because you can make your own rules. I think of it as work-life integration rather than work-life balance. Balance is an unhealthy way of looking at things because it’s as if there’s some ideal way that it’s supposed to be. Work is important to me. My family is important to me. I’m going to find a way to make it work.”

Wine and start-ups

It’s knock-off time in Sydney. The sun sets as city workers make their way to Wynyard train station. Buses, cars and cabs choke York Street. But at one office building the human traffic is inbound. Young women are making their way to Fishburners, a tech start-up co-working space. They take the lift to level three, walk down a long corridor with open doorways revealing mostly young men – top buns, manicured beards and sneakers – hunched over laptops.

At the end of the corridor is a large room, its back wall adorned with silver balloons bearing the letters LMBDW. A table is lined with glasses and wine bottles – sparkling, sauvignon blanc, rosé or shiraz. This is a pour-it-yourself function in an oh-so-start-up fashion.

Like Minded Bitches Drinking Wine is a quarterly event where women share advice and hear from other women who’ve established their own businesses. About 80 women attend, having paid $30 to cover the wine, cheese, sausage rolls and sliders. Half of the women say they want to launch a start-up. The other half already have. The energy is palpable.

Attendees include ophthalmology surgeon Alina Zeldovich, who spends her hours outside of practice with a female ophthalmologist friend on their business, Beamers. It makes UV protection sunglasses for kids to help prevent eye problems. Zeldovich wants to learn how to grow her business.

Like Minded Bitches Drinking Wine is the brainchild of Young Rich Lister Jane Lu, founder of fashion online retailer Showpo, and her friend, entrepreneur Gen George. The pair initially gathered 20 women for dinner to kick around ideas and seek advice from others on challenges they were facing in their businesses. It proved popular, so the duo opened it up to anyone who cared to join. Without any advertising, they’ve amassed 85,000 members in 25 cities worldwide.

In January 2014 she bit the bullet and, with Pearce, sketched out her workouts to create an e-book, the Bikini Body Guide. It was so successful it was downloaded illegally more than 1m times.
Damian Bennett

Lu knows all about managing one’s self-doubt. She wasn’t initially brave enough to tell her parents, who’d migrated to Australia from China, that she’d packed in her safe job at top-tier consultancy EY to have a crack at fashion retailing by creating Showpo. Before it got off the ground she was given plenty of reasons to doubt herself. “When I quit my job I was told I was an idiot,” says Lu. “What do you know about fashion? What do you know about retail? What do you know about starting a business?

“Women question themselves a lot more and wait for things to be perfect before starting. They may think, what if I lose money? What if I look stupid? What if I quit my job and then have to look for another one?” But Lu backed herself; for her, the bigger risk was in not having tried to start a business at all. Showpo generates about $30 million a year in revenue.

The women clutching their wine glasses at the LMBDW event are full of optimism. After another glass of rosé, everything’s possible. But there’s only so far that sisters can do it for themselves. Eventually they’ll need to get financial backing. And that’s where gender really comes into play.

Solving problems

Entrepreneurs are at their heart, problem solvers. Like authors often write fiction from their own experience, entrepreneurs tend to create businesses that stem from their own frustrations that things can or should be done differently.

Many women featuring on the Young Rich List are predominantly in businesses making money from other women – Itsines with Sweat, Morris with Adore Beauty. Fellow debutant Alarna Longes once worked as a receptionist at a beauty clinic while attempting to pursue a media career. Noticing the clinic in a tiny medical centre was booked out every day, she instead teamed up with Dr Philippa McCaffery to establish Clearskincare Clinics, offering everything from acne treatments to dermal fillers. It would grow to 44 sites across Australia and New Zealand before getting snapped up by listed Australian Pharmaceutical Industries, the owner of Priceline, for $127.4 million in June.

Yet when women need capital to grow their businesses, they are often talking to a room filled with men who have little experience with the product or service being pitched to them. When AFR Magazine approached two venture capital firms for an interview, the male partners of each included female executives in the discussion. Blackbird Ventures partner Niki Scevak concedes he’s embarrassed at the state of affairs, blaming his industry’s unconscious bias and self-reinforcing networks. “There is the danger of an echo chamber,” he says.

Indeed, for evidence of that, you need look no further than Blackbird’s own website, which tells budding entrepeneurs the VC fund takes “far more notice of founders introduced to us by people we trust, whether they be founders we have invested in, angel investors we have co-invested with or people we have worked with. So please, try to network to find a warm introduction.”

Scevak says Blackbird is broadening its network by employing and engaging more women in its operations. “We are approaching things differently. We need more female investment partners, more female mentors so that we can invest in more female-led companies,” he says.

Samantha Wong joined Blackbird as a partner in 2015. She agrees that some men can’t relate to female-focused business ideas, dismissing them as too niche or too nascent when, in fact, they simply don’t have a clue. But just as important is the lack of women who study STEM, and hence lack skills in technology, she says. Financiers are more likely to back a business whose founders can build their own products, believing they iterate faster and burn less cash than founders who need to outsource the tech to others.

Breaking the mould

Paul Bassat is a former Young Rich Lister, debuting on the inaugural list in 2003 after establishing jobs website SEEK with his brother Andrew. Now he’s backing other budding entrepeneurs at Square Peg Capital, which counts design company Canva and small-business lender Prospa among its investments.

“We are not seeing as many female entrepreneurs as we would like to; if you look at the broad statistics it’s not as high as we would like it,” Bassat says. But he argues Australia is doing far better than its global peers. Of Square Peg’s 18 Australian investments, eight have a woman as a co-founder. Three are founded by women only. Bassat is confident change is happening. Square Peg has hired five women on its 17-member team in the past 16 months, including Imogen Baxter who works with budding entrepreneurs to understand the investment process. “VC firms are much more aware of the accessibility issue so they have hired people like me to be a friendly in-between,” Baxter says.

That’s perhaps why there’s also been pressure from heavy-hitter investors. The push for change, which began in earnest five years ago, involved countering venture capital’s image as demanding long, inflexible hours. “We had to tell people that as asset owners you are the one others work around,” says Yasser El-Ansary, chief executive of the Australian Private Equity and Venture Capital Association (AVCAL). “You can play a significant role in deciding when meetings are held and when you can travel. You can call the shots. It is a flexible role – if you can’t have a board meeting at a certain time, you say you can’t.” Some firms told recruiters they wanted only women on the short list of potential hires.

El-Ansary agrees that by encouraging more women to the industry, more female entrepreneurs will find funding. “I would expect that in five years’ time Australia will be home to a higher proportion of successful female entrepreneurs helped by our industry.”

Female start-ups growing

There’s plenty of appetite. About a quarter of the country’s start-ups are now founded by women, up from 16 per cent four years ago, according to Startup Muster. This new crop of women will be trying to achieve their dreams with more support than the generation that went before them. Kate Morris is one of those working on giving back – creating a scholarship for women studying computer science.

Then there are investors such as Bill Bates and Ben Hodson. Both have two daughters and both talk of wanting to make sure they will have every opportunity that was afforded to them. They’re backers of Scale Investors, an investment firm set up by Carol Schwartz, Susan Oliver and Annette Kimmitt in 2013, aimed at backing female-led start-ups.

Scale’s chief executive, Ariane Barker, spent 20 years in the male-dominated investment banking industry and in that time experienced plenty of unconscious and conscious bias. She says female founders can find it intimidating presenting to male-dominated panels throwing off a lot of financial jargon. Scale works with would-be founders to explain the process of investing to help them avoid pitfalls and be as polished as possible before turning up to pitch to investors.

Instead of asking women why they will succeed, they are asked how Scale can help them succeed.

Are quotas needed?

Entrepreneur Janine Allis was one of the few women to debut on the inaugural Young Rich List 15 years ago with her Boost Juice business. It’s since gone global and is one of four brands within her Retail Zoo empire, now majority owned by Bain Capital. She’s upbeat. Change is, to her, inevitable.

“When my grandmother got married she wasn’t allowed to work,” Allis recalls. “That wasn’t that long ago. So that’s what we have come from. It’s a generation thing. I think for my kids, it’s not even going to be a thing.”

The cover of the AFR Magazine's November issue.
Damian Bennett

That’s not to say she doesn’t think some prodding is needed. She’s a believer in quotas for boards, reversing an earlier view that it should be on merit alone. Quotas, she believes, will drive the generational shift. “I believe quotas are something we actually need to consider. I never would have thought I would say it but I think it will make a difference. Businesses that have a more diverse mix on boards are more profitable businesses. They just are. The numbers don’t lie.”

A big dose of good publicity doesn’t hurt either. Bassat says the profile of young entrepreneurs such as Itsines and Melanie Perkins from Canva, who declined to be interviewed for this story, will be invaluable for future generations of female entrepreneurs. “If you look at Kayla and you look at Melanie, it is really important that they be role models as much as possible. They are going to inspire. I think sometimes in Australian business we are a little bit humble and modest and we don’t want to put ourselves out there, but I think that for people like Kayla there’s a really important reason why she should be putting herself out there. And that is because she is going to inspire others: if a young woman from Adelaide can build this amazing, successful business, why can’t I?”

Itsines sure has made the big league, and has no intention of leaving South Australia; indeed she and Pearce own more than 12 investment properties there. Reflecting on her success, Itsines wishes she knew earlier that anything was possible. “In Adelaide you are not told you have the opportunity to be a superstar. If I was to grow up somewhere like New York, everyone there is very confident and everyone wants to make it,” she says. “If I could change anything, I would talk about the opportunity of being an entrepreneur in schools. I didn’t even know what that word meant in school. I was, what is that word? Oh you know, someone who goes off and does their own thing. I was, what?”